Kandi E-car gets China approval

The Wall Street Journal - Kandi Technologies Group Inc. KNDI 0.94% said an all-electric sedan the Chinese firm developed with Geely Automobile Holdings Ltd. 0175.HK 0.55% received an approval from Chinese regulators that will allow consumers to qualify for subsidies and incentives.

Shares of Kandi Technologies were up 59% at $6.20 in recent trading. Through Tuesday's close, the stock has more than doubled in the past 12 months.

The maker and developer of electric vehicles and all-terrain vehicles created a joint venture to develop and produce electric vehicles in Chin—the world's largest auto market—earlier this year. Each company has a 50% stake in the venture.

Kandi Chairman and Chief Executive Hu Xiaoming said the approval for the vehicle—called the Kandi Brand/JL7001BEV model—demonstrates "Kandi and Geely have accomplished a significant progress in their cooperation. We will take advantage of the strength, resources and expertise of both Kandi and Geely to achieve a greater success in manufacturing, R&D and sales of the EV in China."

The Chinese government is aiming to have 500,000 hybrid and electric cars on Chinese roads by 2015 and 5 million by 2020.

Though the Chinese government's campaign for "new-energy" vehicles has focused on purely electric vehicles, they remain a small part of the market.

Even with the help of generous government subsidies, Chinese consumers bought only 11,375 electric cars in 2012, a fraction of 19.3 million vehicles sold the same year, according to the China Association of Automobile Manufacturers. Sales of hybrid vehicles have been weak, too.

Geely Automobile's American depositary shares were down two cents at $9.25 in recent trading.